How Trust affects your Bottom line.
I attended the trust conference today run by Talent Dynamics and heard some amazing speakers all talking about building a culture of trust in your business, from trust in your brand, your team, yourself etc, and how this has a tangible effect on your bottom line.
There are some exercises in my notes, questions you can answer to see how trust affects you. Share your answers or thoughts with us.
I have made some notes from the key speaker event,Steven Covey talking about the cost of lack of trust, here is my summary, forgive me Steven if it does not match your words exactly, but I hope I capture the intent and tone you were trying to convey :
Trust and its effect on your bottom line by Steven Covey
Trust is not a fluffy thing, it has real affects on you and your business, starting with these three areas, that he addressed in his 3 hour talk.
- It has an economic effect
- Good leaders need to be trusted today
- You can be taught trust
Here is a simple exercise to illustrate cost :
- Identify a person that you trust ? Customer, partner, team mate, peer etc …
- Now jot down what it’s like work with them, communicate with them, how fast you can get things done and the results you get.
- Now do that again, but this time it should be someone you do not trust, answer the same questions.
The difference it makes ….Is it a small or a big difference…can you put a price on that difference?
Think about high trust relationships, communication flows, you can share our views, even if you disagree it’s not a problem,. Its Positive and gets results.
Now in low trust relationships you tend to be careful and withhold yourself, you cat be open with facts, you take notes to back yourself etc etc. It’s a draining experience. And even when you are precise in your communication its often misinterpreted.
So communication is first and foremost about trust and trust means confidence, confidence in you, your company or your brand.
There are 3 types of trust:
- Blind, NOT good, it means you can be gullible
- Distrust, when you start from the point of “Never Trust Anyone”. This is often seen in people or businesses that have been burned once never trust the team, suppliers, clients again. The danger of this attitude is it leads to a lack of team work, a lack of innovation and lack of passion.
- Smart Trust…. This is where you start with a bias to trust, balance it with some assessments to verify. Does not mean verify before trust, in other words you trust first, then think of what you need to continue building that trusted relationship.
Steven shared an example from a large health organisation with the 23 executives, he worked with them individually, asking them to (confidentially) put their peers into either camp trust or no trust ….. most of the 23 trusted most of their piers, but three of the executives were dismissive of everyone, didn’t trust anyone… And guess what… these were the three that were on everyone else’s not trust list…
So in order to be trusted, you need to have the courage to trust others first.
1. Trust and its Economic effect
If you withhold trust it has reciprocity. In companies where managers don’t trust staff, staff don’t trust them, I am sure we all have stories. Trust inspires, people want to live up to it, MOST OF US ARE TRUSTWORTHY So don’t design a company based on the 5% of people you can’t trust, build it those you do trust.
Steven gave a brilliant example of a bike shop that never asks people for any security before taking a bike out for a test ride.
You must be mad … they are told, ask for wallets or a passport, but Chris the owner refuses, he said he wants to start a relationship from a position of trust. Yes he has lost 5 bikes since adopting this a few years ago, but has increased business by thousands of sales.
Chris sees this as his unique marketing tool, yes bikes lost are the price, but huge brand and customer loyalty are the payback for this trust. It makes them money.
When trust goes down…speed of delivery goes down and cost goes up… and visa versa.
- When teams trust each other they work quickly and quick results brings down costs
- When you work with a customer that trusts you, its easy to make a deal, happens quickly, costs less to make.
We can all think of scenarios of both low and high trust relationships and how they can cost us money.
This was my best example of the day, it is all about a small business, a man selling coffe and donughts from a small van in the financial distric of an American city. He noticed he had long lines in the morning, and as he couldn’t serve them quickly he noticed that customers were leaving before getting coffee.
It really bothers him, so he came up with a fantastic solution, he would pour coffee, but he added an honest basket, put in some change and told his customers that they could help themselves to change. Speed improved, he served more people, he got more business and he even improved his tips .. he trusted his customers, and they lived up to it.
Could you bring this into your business in some way? Have you seen examples like this?
High trust organisations outperform low trust organisations by 286%!
2. Trust and Leadership
Think about it the things we need in business today is teams (great talent), the ability to collaborate with others to innovate and build a business.
And guess what the best people want to work for high trust companies, the 100 top companies (Forbes) have high trust and have very low staff turnover. People want to be trusted, and organisations with high trust have better engagement (communication).
High trust builds cultures of high innovation, people feel they can take risks, be creative and make mistakes. Low trust means no innovation, no passion, no creativity.
High trust wont rescue a lousy strategy but you can be sure that lack of trust will derail the best strategies… if people trust you, you make mistakes people will stick with you
BIG BIG FACT …. if you can increase trust by 10% it has the same effect as a 36% increase in pay …. Now that’s an effect on bottom line
3. Learning trust… the practical bit.
Trust. It all starts with Credibility.
4 cores to credibility (believability)
- Integrity – walk the talk, have you got the courage to do this when it may cost you money?
- Intent – When you want a win -win, for you and your customer, team etc, tell people your intent and why you have that intention, if you don’t tell them your intent, they will ascribe intent to you.
- Capability – TASS Talent, attitude, skills and style… are you staying relevant… are you learning, adapting … in order to be trusted you need to reinvent and stay ahead eg. I have 15 years’ experience or do you have 1 year of experience you repeated 15 times. Are you on the look- out for better ways to do things for your clients
- Results – Your current and past performance will make people think that is what you will produce in the future, show results.
The 5 Waves of Trust:
Self .. start here, make yourself trustworthy. Think of instructions on an aeroplane, when your drop down mask appears you are told to put your mask on first before helping others. Then look at building trust in your relationships, your organisation, the market and then within society.
An example of a company that has used the 5 waves is the Swedish company Nordstrom, they are known for brilliant service … that’s market trust.
But they start inside, Steven showed us the employee handbook, a 1 page document, with a few words on either side… Welcome to Nordstom, happy to have you… and on the flip side … Just one rule … use good judgment in every situation.
Now the last time I saw a handbook, it was pages and pages long!
How do you build trust with your team or your clients?